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Revenues Working Group Presents Recommendations to Full School Finance Commission

12.04.2018 — On Friday, November 30, the Texas Commission on Public School Finance working group on revenues presented its recommendations to the full commission. 

Sen. Paul Bettencourt, who chaired the working group, began his presentation of the recommendations by noting the additional revenues predicted to be available next session. He spoke of the increase in sales tax revenues that have exceeded the comptroller’s projections, along with additional revenues expected to be collected via the state’s severance tax. He suggested that these revenues could be used.

Bettencourt then laid out the working group's proposals:

  1. The first proposal was the governor's plan, shared in late October. He noted that this plan would increase the state share of public education funding, limit recapture, and address increasing local property taxes.
  2. The second proposal, created by the Texas Taxpayer and Research Association (TTARA), would limit recapture and includes tax rate compression as values increase so that the compression percentage would decline by a corresponding amount. 
  3. The third proposal was from Lindale ISD Superintendent Stan Surratt. It would allow recapture to increase but would distribute it to public schools, the state, and property taxpayers.

Justice Scott Brister, who chairs the full commission, noted that each of these proposals would be costed out.

Commission and revenues working group member Nicole Conley Johnson put forth recommendations that were not listed in the working group's list. She suggested the following additional revenue sources that she believes will be more predictable and sustainable over time:

  • Increase the motor fuels tax that is indexed to inflation by 10 cents ($900 million)
  • Consider existing sales tax exemptions for additional revenue
  • Use funds from the state’s Economic Stabilization (Rainy Day) Fund
  • Increase the tax on alcohol by 50 percent, since substance abuse negatively impacts many students
  • Reinvest property value growth into public schools
  • Allow for a local sales tax option for school districts
  • Create new “sin taxes” on items such as sodas and candy
  • Create a registration specifically for hybrid vehicles as they do not consume gas at the same rate as traditional cars but still impact roads
  • Tax online sales

No formal vote was taken on the recommendations from the revenues working group.

Rep. Diego Bernal said it was important for the committee to not focus solely on property tax relief. He said that it is important, but it shouldn’t overshadow the need for additional funding for public schools.

See the PowerPoint presentation from the meeting. Note that the fourth recommendation included in the presentation, submitted by the Texas Public Policy Foundation (TPPF), was tabled in the working group meeting earlier in the week and was not considered at Friday’s full commission meeting.

The full commission will meet again Tuesday, December 11, and Wednesday, December 19, at 10 a.m. A December 5 meeting was canceled.